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What are the Different Types of Leave for Employees?

Annual Leave

12 June 2025 (Last updated 3 Sept 2025)

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Navigating the leave entitlement landscape can be challenging for employers. It can be tricky for entrepreneurs and small business owners to understand the appropriate leave entitlements for their employees.

In this blog, we outline standard leave entitlements for Australian businesses, but it is always important to check the applicable Award, enterprise agreement or contract in case these provide for greater entitlements. Please note that the advice below is general in nature and is not intended to act as professional advice.

Annual leave

Who and how much?

All employees, other than casual employees, are entitled to four weeks of annual leave per year, or five weeks per year if they are a ‘shiftworker’ (as defined in the applicable Modern Award or Fair Work Act

When can they take it?

Annual leave must be taken at a time agreed by both the employer and the employee. An employer must not unreasonably refuse a request for annual leave.

Does this type of leave accrue and do you have to pay it out on termination?

An employee’s entitlement to annual leave accrues progressively throughout the year, and any accrued leave which has not been taken must be paid to the employee on termination, regardless of whether the termination was initiated by the employer or the employee.

How much does an employer pay?

The employee must be paid at least their base rate of pay for their ordinary hours during a period of annual leave, unless their Award, enterprise agreement or contract provides a greater entitlement.

Personal/carer’s leave (often referred to as sick leave).

Who and how much?

All employees, other than casual employees, are entitled to ten days of paid personal/carer’s leave (on a pro-rata basis for part-time employees) per year of service with their employer.

When can they take it?

An employee is entitled to take personal/carer’s leave when they are not fit for work due to a personal illness or injury, or where they need to provide care or support to a member of their immediate family or household (eg child, sister, parent).

Does this type of leave accrue and do you have to pay it out on termination?

An employee’s entitlement to personal/carer’s leave accrues progressively throughout the year according to their ordinary hours of work. Employees are not entitled to have accrued personal leave paid out on termination, unless they are entitled from their contract or Award. This type of leave accumulates from year to year.

How much does an employer pay?

An employee must be paid at least their base rate of pay for their ordinary hours of work whilst on personal/career’s leave, unless their Award, enterprise agreement or contract provides a greater entitlement.

Compassionate leave

Who and how much?

All employees, including casual employees, are entitled to compassionate leave. However, only permanent employees are entitled to be paid for this leave. Casual employees are entitled to unpaid compassionate leave. The entitlement for all employees is two days per occasion.

When can they take it?

An employee is entitled to take compassionate leave when a family member of their immediate family or household suffers an illness or injury that threatens their life or dies.

Does this type of leave accrue and do you have to pay it out on termination?

No, as it is occasion-based leave. Employees are not entitled to have any compassionate leave paid out on termination.

How much does an employer pay?

Permanent employees must be paid at least their base rate of pay for the ordinary hours they would have worked had they not been on compassionate leave.

Community service leave

Who and how much?

All employees, including casual employees, are entitled to unpaid community service leave .

There is no limit to the amount of community service leave an employee can take, provided it meets the definition of an eligible community service activity, and that it is reasonable in all the circumstances (except in the case of jury service leave, which is always taken to be reasonable).

When can they take it?

An employee is entitled to be absent from their employment for a period if they are engaging in an eligible community service activity, for example the State Emergency Service, the Country Fire Authority or while on jury service. Employees are also entitled to leave for the reasonable travelling time associated with the community service activity and reasonable rest and recovery time.

Does this type of leave accrue and do you have to pay it out on termination?

No, as it is based on occasions of community service. Community service leave is not paid out on termination.

How much does an employer pay?

The only paid form of community service leave is for permanent employees who perform jury service, where there is the provision to ‘top up’ their pay for generally up to ten days.

Parental leave

Who and how much?

All employees, other than casual employees, are entitled to parental leave  once they have completed at least 12 months of continuous service with the employer, immediately prior to the expected date of birth of the child, or in the case of adoption, the expected date of placement of the child.

The entitlement for eligible employees is 12 months of unpaid parental leave, with the ability, in some circumstances to request a further 12 months.

When can they take it?

Unpaid parental leave must start either on the birth of the child or up to six weeks prior to the expected birth. The employer and employee can agree on the employee taking parental leave earlier.

What if an employee has another child?

Employees who have already taken parental leave do not have to work another 12 months before taking another period of parental leave with the same employer.

How much does an employer pay?

Generally parental leave is unpaid, unless a contract or policy term states otherwise. Employees may be entitled to government funded paid leave entitlements.

Long service leave

Each state has retained their own long service leave arrangements, however, most provide a similar entitlement to leave after ten years of continuous service with the same employer. Each state is slightly different with regard to how much leave can be taken, and the length of service required for LSL to be paid out on termination.

Regular and systematic casuals – a watch out

Employers need to beware that if a casual employee becomes ‘regular and systematic’, they can be entitled to more benefits than those of true casuals, including unpaid parental leave and the right to bring an unfair dismissal claim.

Understand leave entitlements with Peninsula

Peninsula offers tailored advice and resources for Australian businesses. Our team provides customised advice that helps your business and ensures you meet all your obligations as an employer. Call us on 1300751867 today to understand how we can help you.

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Annual Leave

When Can I Force an Employee to Take Annual Leave?

Large unused amounts of employee annual leave can add huge financial strain onto small businesses that they cannot afford in the long run. If for instance an employee decides to quit, desiring to take annual leave as part of final payment, or they want to take their built-up holidays in one go, you can see it has the potential to leave a business owner in a significantly vulnerable position.  What is excessive annual leave? Employees are usually entitled to a minimum of 4 weeks paid annual leave per year, or 5 weeks for some shift workers. Annual Leave builds up over the year, so as more hours are worked by the employee, then more paid leave grows for them over the year. Leave not taken then rolls over to the next year.  Excessive annual leave is when an employee has accrued more than 8 weeks paid leave, (or for a shift worker, they have accrued more than 10 weeks of paid annual leave). Leave-related calls to Peninsula’s advice line are common, sparking concerns about employees taking unexpected annual leave or accruing leave to take it at busy periods, causing small businesses to scramble for staff. This is where having a leave policy comes in handy. Can I force an employee to take annual leave? An employer can force an employee to take annual leave in certain situations such as: the business is closed during the Christmas and New Year period an employee has accumulated excess annual leave The rule about when and if an employer can direct an employee to take annual leave is set out in Awards and agreements. As a business owner, it’s always favourable you reach out to your employee in the first instance. Making time for a good-natured chat about the accrued leave could resolve the issue, after-all most issues can be solved with an amicable discussion. Genuinely having a desire to reach a mutual agreement together, (that’s best for both of you) is the best way to approach the tricky subject of excessive annual leave.  How do I force an employee to take their annual leave? If you find you just cannot settle on a mutual agreement, and the employee is refusing to take the built-up annual leave, then there are actions you can take as an Employer. Most modern awards provide employers with the ability to direct employees with these excessive leave balances to take annual paid leave.  An employer may direct an employee (in writing), to take one or more periods of annual leave. Any direction under the award clause to take annual leave must adhere to these points: The employer’s direction to take leave must be in writing. It must not result in the employee’s remaining paid annual leave balance being at any time less than 6 weeks, (when any other paid annual leave arrangements are taken into account). The employer’s direction to take leave must not provide for the employee to take any period of paid annual leave of less than 1 week. It must not provide for the employee to take a period of paid annual leave beginning less than 8 weeks or more than 12 months after the notice is given. It must not be inconsistent with any other leave arrangement agreed by the employer and employee. The employee must take paid annual leave by following this direction under the award clause that is in effect. Forcing an employee to use excessive annual leave You can direct an employee who has built up excessive annual leave, (more than 8 weeks) to take their paid annual leave.  That is, if it’s directed in written form, such as an email or letter. The exact details will be dependent on their award for their particular job role. Most modern awards after 2016, have clauses for excessive annual leave. As a business owner, it’s important to handle excessive annual leave sooner rather than later, as heavily built-up leave can be a financial liability.  It can leave you short-staffed if employees decide to hand in their notice, cashing out the annual leave, or perhaps if they decide to take their leave in a long chunk, leaving you short-staffed for an elongated time. Next steps Encouraging your employees to take long weekends off, even short mini breaks can help your business avoid a bottleneck of future leave requests once peak season arrives. This may reassure you as a business owner that financial liabilities are being reduced, and that productivity is maintained as employee mental health is boosted with well-deserved time off from work. Remember talking to employees is the first step to finding a mutual agreement over any excessively accrued leave or excessive annual leave. How can Peninsula help you? We have worked with thousands of businesses across Australia and New Zealand in employment relations and work health and safety. We understand the challenges small business owners face regularly. Call our 24/7 Advice Line on 1300 761 935 today to get all your tricky questions answered.

Annual Leave

The History of Annual Leave

All employers in Australia know how hard it is to keep up-to-date with the latest legislation changes. The recent rush of workplace legislation changes may seem like a modern phenomenon, as the Fair Work Act was only introduced in 2010. To recap, in addition to the COVID-related changes like JobKeeper, JobMaker and pandemic leave, this year so far has seen annualised salary changes, four-yearly updates to Awards, and casual overtime changes just to name a few. A cornerstone of the Fair Work Act is the National Employment Standards (NES), the set of 10 minimum entitlements which must be provided to all employees in Australia. One of the minimum entitlements provided by the NES is annual leave: a permanent employee is entitled to four weeks of paid annual leave, per year, with shiftworkers receiving an additional week of paid annual leave on top of that. It is important for employers to ensure that they comply with the NES and provide their employees with their annual leave entitlements. While the workplace relations landscape does change constantly, some things do stay the same. Annual Leave became standard in 1970; but what has changed since and when did employees receive the standard four weeks of annual leave? 1906: The First Annual Leave Entitlement The federal maritime award introduced 10 days of paid annual leave in the early 20th century. This was the first official instance of annual leave in Australia. The introduction of the federal maritime award also came in 1906, after a series of strikes in the 1890s brought employee rights to the fore. The federal maritime award was, along with the shearers award, the first award in Australia. These awards were introduced by the Commonwealth Court of Conciliation and Arbitration, an early forerunner of the Fair Work Commission. 1935 to 1974: Annual Leave Becomes Widespread Paid annual leave – along with sick leave – was gradually introduced into federal awards. The Printers’ Union won one week of paid annual leave in 1935, and soon this entitlement slowly became widespread in Australia. In 1945, in the year that the Second World War ended, workers won the right to two weeks’ annual leave, and between then and 1974 two weeks of paid leave was generally adopted as the standard entitlement through Australia. 1974: Four Weeks for Public Service Workers in NSW Following a decision by the NSW Industrial Relations Commission, four weeks’ annual leave was introduced for each year of service. While this decision only covered public sector employees in NSW, this was the first time that Australian employees in any sector were entitled to four weeks’ paid leave. 1988-2009: A New Act Every 4.25 Years Between 1988 and 2005, there were four major employment relations Acts passed. The Industrial Relations Act 1988, which replaced the 84-year-old Commonwealth Conciliation and Arbitration Act 1904, came into effect in 1989. This Act was then amended by Industrial Relations Reform Act 1993. These Acts were brought in by the Bob Hawke-Paul Keating Labor Party Government, which lasted from 1983 until 1996, when John Howard came into power. In 1996, Howard’s Liberal Government brought in the Workplace Relations Act 1996, which replaced the Act passed eight years previously. In 2005, they passed Work Choices (formally known as Workplace Relations Amendment (Work Choices) Act 2005). Throughout this tumultuous 17-year period, where a new Act was passed on average every 4.25 years, the standard entitlement of four weeks’ annual leave generally stayed intact. The Work Choices Act provided employees with five entitlements, one of which was annual leave. 2009-Onwards The following election was won by Kevin in ’07. The Rudd Government passed the Fair Work Act 2009, which came into effect on 1 July of that year, superseding the Workplace Relations Act 1996. The Fair Work Act outlined the minimum standards that should apply to all employees, one of which is the minimum entitlement of annual leave. Annual Leave Will Stick Around As time has passed, annual leave has gone from a rare entitlement to becoming a standard right for employees in the Australian workplace relations system. Even during the see-sawing of workplace relations legislation for almost two decades before the introduction of the Fair Work Act, it remained a right. Now entrenched, it is unlikely that annual leave will go away. Employers will have to keep themselves up to date on how annual leave works, what their obligations are and what the rights of their employees. There’s no better help available to assist employers get on top of their workplace relations than Peninsula. Call us now for free initial advice on any annual leave question you may have.

Annual Leave

Five Rules Of Annual Leave

National Employment Standards (NES) Annual leave is one of the ten National Employment Standards (NES). Every employee, excluding casuals, is entitled to at least four weeks of paid leave each year. Shiftworkers may be entitled to additional leave under the applicable modern award, agreement or the Fair Work Act 2009. Accrual Of Annual Leave Despite every permanent employee being entitled to at least four weeks of annual leave per year, in most cases the entire balance is not available from the first day. Annual leave will generally accrue progressively throughout the year and will carry over from year to year if unuse Annual Leave Loading Under some modern awards, an employee may be entitled to additional leave loading when on annual leave. This is usually 17.5% or their weekend penalty rate or shift rate whichever is higher.As the loading can vary, it is vital employers check what their relevant modern award or enterprise agreement states, as well as their employment contracts. Under some modern awards, an employee may be entitled to additional leave loading when on annual leave. This is usually 17.5% or their weekend penalty rate or shift rate whichever is higher.. As the loading can vary, it is vital employers check what their relevant modern award or enterprise agreement states, as well as their employment contracts. Upon termination, annual leave must be paid out to employees as if they had taken the leave. This includes any entitlement to annual leave loading outlined in the modern award or enterprise agreement. For advice on annual leave entitlements specific to their workplace employers should contact Peninsula today.

Annual Leave

Understanding Time Off In Lieu

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Common provisions include: TOIL can only be taken when genuinely agreed Each time overtime is worked a separate agreement to take TOIL must be made and it must be recorded in writing How time off is calculated (e.g. time for time or penalty) The time off must be taken within six months after the overtime is worked, or at a time agreeable to both the employer and employee The employee may end the agreement and request to be paid overtime instead of taking time off, in which case the employer must pay the overtime in the next pay period What should each agreement include? First, it must be in writing, though email is permissible. Additionally, there will need to be a new agreement for each time overtime is worked. 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Annual Leave

Personal Leave vs Annual Leave: What Are the Differences?

Every employee will want or need to take time off work at some stage and will most likely apply for personal or annual leave. It’s crucial to understand the differences between personal leave and annual leave, when your staff should use each leave type, and what their base entitlements are. What’s the difference between personal leave and annual leave?  Personal leave – also known as sick or carer’s leave – lets an employee take time off work to help them recover from an illness, care for others, or deal with family emergencies. Annual leave, sometimes called holiday pay, allows employees to take paid time off work to go on vacation, enjoy a rest, or take part in any activity they choose.   What are valid reasons for personal leave?  While an employee is free to take annual leave for any reason, personal leave will only be approved under certain circumstances. Valid reasons for an employee taking personal leave include:  They are unfit for work and need to recover from a personal illness or injury.  They need to care for or support a member of their immediate family or household because of an illness, injury or unexpected emergency.   Employees are also entitled to compassionate and bereavement leave if:  A member of their immediate family or household dies, or contracts or develops a life-threatening illness or injury.  A baby in their immediate family or household is stillborn.  They have a miscarriage. Their current spouse or de facto partner has a miscarriage.  How much personal leave and annual leave do employees receive?  Personal leave can be both paid and unpaid. Personal leave is covered by the National Employment Standards (NES), which sets the minimum leave conditions for most employers in Australia.   According to NES laws:   Full-time employees are entitled to at least 10 days of paid personal leave for each year of continuous service.   Part-time employees and permanent staff working variable hours are entitled to a pro rata amount of paid personal leave (based on 1/26th of the employee’s ordinary work hours per year).  Full-time and part-time employees are entitled to 2 days of paid compassionate leave each time an applicable event occurs.   The NES also demands that employers give full-time and part-time employees at least 4 weeks of paid annual leave each year, based on their normal work hours.   In some cases, employers may give employees more annual leave, which will be laid out in their leave policy.   How much should employees be paid?  For both personal leave and annual leave, the minimum amount that an employee must be paid is the base rate of pay for the ordinary hours they would have worked during the leave period.   An employee’s base rate of pay does not include:  Incentive-based payments and bonuses  Loadings  Penalty rates and overtime   Allowances  In some cases, an applicable modern award or industry instrument will determine that an employee receives leave loading on their annual leave pay. This means they are paid an additional percentage of their ordinary base rate of pay. Sometimes an employer contract will specify a leave loading amount. How are personal leave and annual leave accrued?  Both personal leave and annual leave accumulate from the first day of employment, even if an employee is working through a probation period.   Their personal and annual leave gradually accrue throughout the year, and any unused leave will roll over from year to year.   An employee’s leave allowances will continue to accrue while they are on paid personal or annual leave. However, leave will not accrue while they are on unpaid leave, unless it is community service leave or agreed in an award or employer agreement.   How much leave notice do employees need to give?  When applying for annual leave, the amount of notice an employee should give will vary from business to business. It’s best practice to clarify how much notice your company expects and document it in your business’s leave policy. Employees who give less notice than the amount specified may find their leave request is denied.   With personal leave, employees should notify their employer as soon as an event takes place. In some cases, this may be after the personal leave period has already begun. Employees should also notify their employers of when they expect to return to work.   What personal leave and annual leave entitlements do casuals get? While casuals do not receive any annual leave, they are entitled to reduced amounts of personal leave:  2 days of unpaid carer’s leave per occasion  2 days of paid compassionate leave per occasion How can Peninsula help? Peninsula has helped to build thousands of Australia’s best businesses. If you need trustworthy workplace relations or health and safety advice, our FREE 24/7 Advice Line is available to all Australian business owners. Call today to get all your questions answered. 

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